A Change in the Days Debtors Turnover from 35 Days

question 60

Multiple Choice

A change in the days debtors turnover from 35 days to 28 days means that:

• A) debtors are purchasing less on credit.
• B) credit sales are increasing.
• C) debtors are paying their accounts earlier.
• D) debtors are paying their accounts later.

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Definitions:

Selling and Administrative Budget

This is a detailed plan that outlines the expected expenses related to selling the products and managing the business operations.

Cash Budget

An estimation of cash inflows and outflows for a business over a specific period, used for managing the company's cash flow.

Production Budget

An estimate of the total number of units that must be produced in a given period to meet expected sales and inventory levels.

Sales Budget

A detailed schedule showing expected sales expressed in both dollars and units.